Philadelphia makes a splash with first soda tax in major US city

Philadelphia is making a splash this week as the first major city in the United States to enact a “soda tax,” a levy assessed on sugar-sweetened and diet beverages. Thursday, the City Council voted 13-4 vote to approve the levy after months of tough negotiations and harsh criticism from the beverage industry. Mayor Jim Kenney touts the new soda tax as a victory, telling Philly.com the levy is a step toward “changing the narrative of poverty in our city.”

The new soda tax, which will become effective January 1, will cost distributors 1.5 cents per ounce and will apply to thousands of products. The levy will apply to nearly every bottled, canned, or fountain beverage that contains either sugar or artificial sweetener. Baby formula and drinks that are more than 50 percent fresh fruit, fresh vegetables, or milk will be exempt from the levy. While Philadelphia’s soda tax, like many others, was motivated by a desire to raise awareness about consuming too much sugar, it’s uncertain at this time how long it will take for the financial impact of the levy to trickle down to consumers.

Still, the tax will be a financial boon for the city. It’s expected to raise $91 million annually, and the mayor previously suggested using the additional funds to establish a pre-kindergarten program open to all 3-and 4-year-olds in Philadelphia. “Philadelphia made a historic investment in our neighborhoods and in our education system,” Kenney said in a press release. “Today would not have been possible without everyone coming together in support of a fair future for every zip code.”

The city’s new tax is similar in nature to the so-named “sugar tax” recently passed in the United Kingdom, which was also motivated by a desire to raise awareness of the unhealthy effects of consuming high quantities of sugar on a regular basis.